Mr. Speaker, it is nice to be in this full House once again speaking on this topic. I wish to say that it gives me pleasure, but it does not give me pleasure.
It is tragic to see that it has come to this. Ever since my election in 2006, I have a witnessed a systematic smear campaign by the Conservative government to discredit the Canadian Wheat Board. It is a campaign based on ideology and not market sense or democratic principles.
We have seen gag orders put in place prohibiting the CWB from outlining its position, the firing of the former CEO for speaking out in support of the CWB single desk, and most recently, a flagrant violation of democracy by not respecting the recent plebiscite where farmers voted to keep the CWB as it is.
In Minnedosa, Manitoba, during the last election campaign, the minister was quoted as saying that his party respects the vote of farmers who support the single desk. He suggested there would not be any attempt to dismantle CWB unless a majority of producers voted for it. I quote:
Until farmers make this change, I am not prepared to work arbitrarily. They are absolutely right to believe in democracy. I do, too.
Two days ago a number of us stood in this House to denounce the flagrant violation of democratic principles by the President of Ukraine, Viktor Yanukovych. It is tragic and somehow ironic that these same Conservative MPs who spoke out for democratic rights in Ukraine are now ignoring their own minister's comments made in Minnedosa.
We have heard in the House almost daily how the last election was somehow a mandate to do away with the Canadian Wheat Board. Let us not forget there are many issues that people look at prior to casting their ballot. We know, for example, although I do not agree with it, that the gun registry was decisive in swinging votes in western Canada. It is important to remember, however, that farmers only represent 2% of the population spread over 57 western ridings.
If a federal election were called today with the only issue being the dismantling of the Wheat Board, Canadians, including the farming community, would ensure that this so-called mandate would not win. It is because the Conservatives have won a majority in this House they are moving forward with their ill-guided plan to dismantle the Canadian Wheat Board.
As stated by Bill Gehl of the Canadian Wheat Board Alliance:
...claiming the Conservative Party has a mandate from farmers to change the Canadian Wheat Board is ridiculous and I think most urban voters agree that farmers should decide this issue, not Ottawa.
We often hear the government draw a parallel between Ontario farmers and western Canadian grain producers. The two situations are completely different. Anyone who attempts to say they are the same is simply ignoring the facts.
Ontario farmers decided for themselves on changes to their marketing system and not the federal government which made the decision. They chose the open market. Quebec farmers, on the other hand, have chosen to market their wheat collectively.
The other point is the impact on Canada and on prairie farmers from changes to the CWB is much greater than the impact of changes to the Ontario system. Most of Ontario's wheat, about 90%, is sold within Canada or in the northern U.S.A. Most of the prairie wheat, roughly 68%, is exported.
A number of western farmers believe that more U.S. markets would somehow magically open up to them as a result of the loss of the single desk. However, they forget that the U.S. agriculture industry is extremely protectionist. We have seen that in the past. This is especially true now under their buy American philosophy. It is therefore very unlikely that the U.S. would take additional Canadian wheat unless the price of the wheat was reduced to the point that it could replace their domestically grown wheat, allowing the U.S.A. to export even more.
The fact is the Canadian Wheat Board currently seeks high-end markets for high-quality milling wheat and durum in over 70 countries, and does not have to pursue markets by reducing its prices. I might add that this obviously gives a premium to Canadian farmers.
The other important point to mention when comparing Ontario and western Canada is the fact that transportation is a less important factor in Ontario. Most Ontario farmers can get their crop to market for $15 a tonne in freight costs due to the close proximity of flour mills and Great Lakes terminals. On the Prairies, the volume produced along with the distance between farms, country elevators, inland terminals, domestic markets and ports make transportation costs significant.
The Canadian Wheat Board is a strong advocate for fair transportation rates and provides a countervailing force to the railway's power. It is very probable that railway costs will increase for farmers once the CWB is gone.
Let us not make the mistake of deluding ourselves that the Wheat Board will survive in a dual market system. Currently it provides stability and certainty for farmers in what I would say are volatile world markets. Once it no longer has a mandate, farmers will be free to choose when and if they wish to deal through the Wheat Board. This will tend to bring prices down because the Wheat Board will have lost its authority among its trading partners. Let us not forget that a powerful organization with a monopoly can dictate prices in the world and obtain the highest premium for our farmers. Farmers will eventually end up on the losing end.
In regard to the movement of grain in western Canada, without the Wheat Board's ability to organize deliveries, it is likely that farmers close to inland terminals and those with large trucking capacity will plug the system at harvest time. The strongest will survive while others will be left behind. In other words, it will be the survival of the fittest.
What will be the consequences of eliminating the single-desk system? First, we will see decreased revenues for farmers. Now, the Canadian Wheat Board obtains lucrative premiums for farmers in the Prairies, which means that the Canadian Wheat Board takes a highly strategic approach to where and when it sells during the year. The result is that, every year, the board enables farmers to earn several million dollars more than they would in a free market. But we are headed towards the free market now.
The Canadian Wheat Board does not have any capital assets. Once it is dismantled, it will need to acquire a considerable amount of capital assets if it wants even the slightest chance of surviving in a free market. Who will pay for that? Plus, there will be very high costs associated with dismantling the Canadian Wheat Board.
Current activities will have to cease. All of the related costs will have to be paid so that no potential new entity ends up with that burden. Since the government is the one that chose to dismantle the Canadian Wheat Board and not the farmers, the farmers should not end up on the hook for these expenses.
And then there is the city of Winnipeg. The Canadian Wheat Board employs over 400 people at its headquarters and helps maintain over 2,000 jobs, for a total of over $66 million in labour income in Winnipeg. At the provincial level, the Canadian Wheat Board's contribution to gross production is estimated at $320 million, which represents over 3,000 jobs and labour income of over $140 million. What will happen to the city of Winnipeg and the province of Manitoba, to the people who are working now and are part of this system? Will they lose their jobs? Will they be able to find another job somewhere else? What we see here is uncertainty.
What we are seeing here is what I would call “economic madness”. A successful organization or a farmer-run corporation that puts money into the pockets of farmers and contributes millions of dollars to the economy of our nation is being dismantled to satisfy the demand of a small number of farmers who think they will be able to survive in a ruthless world market.
In all probability some will survive, but what about the rest? What will happen to the majority who have relied on the stability and protection of the Wheat Board in difficult economic times?
The debate is ongoing and history will be the judge.
I have before me a letter written to the Prime Minister, dated May 6, shortly after the election, by Mr. John Manley, CEO of the Canadian Council of Chief Executives, which is an extremely powerful business lobby group representing 150 of the most powerful corporations in our country.
I will quote from page 3 of the letter, which states:
As a demonstration of Canada’s strong commitment to trade liberalization, we endorse your plan to reform the marketing practices of the Canadian Wheat Board.
[...]
Consistent with that, we believe the time is right to phase out the national supply management systems for eggs, dairy products and poultry, which penalize consumers and have seriously damaged our country’s reputation as a champion of open markets--
The Canadian Council of Chief Executives is directing our Prime Minister to get rid of the Wheat Board and supply management.
People laugh at this and say that there is no way that could be happening because they are supporting supply management. The question we must ask ourselves is not if but when will the Conservatives be phasing out supply management now that they have successfully destroyed the Canadian Wheat Board.
I ask my colleagues on the other side to answer that question. I submit it will be in the not too distant future. There is tremendous pressure from the WTO, our trading partners and the European Union for Canada to decrease or eliminate its tariffs on supply management commodities.
Our country is currently negotiating, although in secret, a free trade agreement with the European Union, the CETA. Last night, at a presentation hosted by the Council of Canadians and CUPE, we were told in no uncertain terms by an expert from France who has been studying the situation in Europe that in addition to pushing for unlimited access to service contracts at the provincial and municipal levels, and I am sure that includes Prince Albert and the surrounding communities, Europe is demanding access to our natural resources. Obviously agriculture is on the table.
What would stop our negotiators from increasing the tariff-free quota from the current 7.5% to 10% and decreasing the over-quota tariffs to satisfy European demands?
Technically, we would still have supply management. However, we have been told by the dairy producers that should that happen each Canadian dairy farmer stands to lose approximately $70,000.
This is a scary situation given the fact that the government's mantra has been and continues to be to open up as many markets as possible without evaluating the potential negative effect on our own producers. It would dismantle and do away with the single desk of the Wheat Board without evaluating potential economic consequences. It would sign an agreement with Europe without evaluating the impact that would have on our municipalities, on obtaining pharmaceuticals, on our water rights and on our agricultural producers.
Today we have witnessed a move by the Conservatives to limit debate on this very important issue.
In today's press release, the Canadian Wheat Board Alliance states:
Even more ominous are rumours the Harper administration intends to avoid Agriculture Committee hearings and fast track this bill through the unusual use of a Legislative Committee hearing process.
It goes on to state:
This is inappropriate because it will restrict Parliament’s right to examine this Legislation and to hear from those most affected: the farmers of western Canada....
People around the world know it is simply wrong for a government to remove hard-won democratic rights from its citizens. Cancelling democracy for western Canadian farmers to end our Wheat Board is a bullying tactic of the worst sort. We are asking for the help of all Canadians to oppose this attack on farmers and the democratic process--
In a letter to the minister, the chair of the board of directors of the Canadian Wheat Board communicated that the Wheat Board had put considerable effort into analyzing what a redefined Canadian Wheat Board would require for any prospect of success. The conclusion it reached was that no alternative could be identified that comes anywhere close to offering farmers the benefits provided by the Canadian Wheat Board's single desk system.
Therefore, if there is no analysis and we are unsure of what the future holds, it begs the question as to why this is happening and why it has not been put to a democratic vote.
There we have it. The government has not performed an economic analysis. It has shown a flagrant disregard for democracy. As well, it is dictating its ideological agenda after having received only 40% of the vote in the last election.
Mention has been made that members on this side of the House are basing their arguments on ideology. Our arguments are based on practical considerations, such as potential economic impacts, impacts to the communities and the City of Winnipeg, impacts on the short line railway systems, and impacts on the port of Churchill. None of these has been identified in any economic analysis that I have seen unless they are hidden in an office somewhere.
This is a sad state for democracy. What is happening here makes absolutely no sense. Surely the minister could get together with the members of the board of directors of the Wheat Board, most of whom are elected and most of whom support the status quo, to attempt to work out some kind of system that is not based on ideology.
The Canadian Wheat Board serves farmers in western Canada to market their wheat, durum and barley. Under the Canadian Wheat Board Act, the organization has an official mandate to bring in the highest possible receipts for farmers from the sale of grain, by effectively profiting from being a single-desk seller.
The Canadian Wheat Board sells farmers' grain in 70 countries. It hands over all of the profits from the sale to farmers, between $4 billion and $7 billion a year.
If we look at the proposed scenario, there are tremendous costs involved in this process of dismantling, changing and modifying the Wheat Board. Who will pay the hundreds of millions of dollars required to transform the organization presently in place? The Wheat Board was financed by farmers and has given profits back to farmers. Will the taxpayer pay for its transformation? Will farmers see increased costs? Will donations be forthcoming from some benevolent society to ensure that no money is lost? These are questions we must ask ourselves.
As I said earlier, history will be the judge of this very sad day in Parliament.
